chapter 5 globalization and trade in...
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CHAPTER 5
GLOBALIZATION AND TRADE IN HIGHER EDUCATION SERVICES IN INDIA – CONSUMPTION ABROAD
5.1 Introduction
Globalization is defined as “the process that is increasing the flow of people,
culture, ideas, values, knowledge, technology, and economic across borders, resulting
into a more interconnected and interdependent world” (Knight, 2006). There are
number of factors which are closely related to this worldwide flow, which are seen as
key elements of globalization. These include the knowledge society, information and
communication technologies, the market economy, trade liberalization and changes in
governance structures. These elements of globalization have significant effect on the
education sector (Knight, 2004a). The process of globalization, which has been
accelerated by the advent of free-market economy and by the remarkable
developments in communication technology, has changed the character of higher
education in many countries. It has led to internationalization of higher education,
which is reflected in increased student mobility, in universities offering off-shore
programmes and establishing foreign campuses, and in twinning arrangements
between institutions covering teaching, training and research (Powar, 2003).
In the present era of globalization, more importance is given to international
trade and investment in higher education. Trade in higher education services has
emerged over the last few years as a major economic sector worth several billions of
dollar for a member of exporting countries such as USA, UK and Australia while
other countries are the main importers and they are- China, India, Japan, Korea &
Taiwan etc. In 2009, 195,107 Indian students going abroad (mainly to developed
countries) termed as import of services in contrast to this, only 21,778 foreign
students came to India to pursue higher education (mainly from developing or least
developed countries) termed as export of services. With such imbalances in import
and export of higher education services, the question arises ‘Is India really ready for
trade regime in higher education’?
The present chapter, in general, examine trade in higher education services in
India with respect to four modes of supply, however, the main emphasis is on export
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via- mode 2 (Consumption abroad). Given that the bulk of trade in education sector
takes place through consumption abroad (Mode 2), therefore an attempt is made to
analyse the mobility of international students in India in the era of globalization i.e.,
from (1991-2009) period. For this purpose, top ten countries from each, High Income
Countries, Lower Middle Income Countries and Low Income Countries have been
selected. An attempt has been made to identify which country has contributed a major
share in the mobility of International student in India. Then, factors has been
discussed which influence the mobility of international students in India.
5.2 Trade in Higher Education Services in India
In the global capitalism, ‘knowledge products’ are freely traded in the
international market place. Internationally, education industry is worth of a trillion
dollar business. Trade in education services particularly at the tertiary level have been
growing in importance. The educational market has grown in size with more exporters
entering the field to satisfy growing worldwide demand. Such market opening bring
gains to all economies, including the developing world, as long as it is done in
carefully and in considered way (WTO, 2001). The opening up of education services
market is crucial to the success of globalization (Lim & Saner, 2011).
The worldwide market for education services is rising faster than the growth
rates observed over the previous decades when the market for education services was
relatively closed (OECD, 2002a, 2002b; OECD-CERI, 2002a, 2002b). In 1995, the
international market for global higher education was estimated at US$ 27 billion and
in 1999 at around US$30 billion. In 2006, the value of trade in higher education was
estimated to be about US$40 billion (Bubtana, 2007), ‘not much less than the
financial services sector’ (Larsen and Vincent-Lancrin, 2002). This shows that trade
in education in general and higher education in particular has a great scope that makes
it a part of GATS. Higher education among all other sectors of education services is
the most traded sector both at global and national level.
In India, there have been very few serious attempts at examining the
implications of trade in higher education services. Some authors like, Deodhar (2002)
provided a complete listing and possible examples of category-cum-modes of each
type in the context of India’s educational services trade and according to this there are
about 20 types (5×4) of trade in educational services. Bhushan (2004) attempted to 137
judge India’s relative strengths, challenges, and opportunities in context of trade in
education services and suggested restricting of domestic regulations; still others
Raychaudhuri and De, (2007, 2008) have described the several barriers to trade in the
era of globalization. Sahni & Kale (2004) talked about the present system of higher
education and attempts to find the possible implications for India in GATS.
According to them, since the agreement is diverse, there are intrinsic pressures for
pushing negotiations of “interest groups” and in the absence of a coherent education
policy the effects of opening up could lead to a distorted function of education. In the
same line, Deodhar (2002) commented that India must ensure that the safeguard
instruments available in the GATS document are credible and enforceable. Even
though no study has yet attempted to measure gains for India from trade in higher
education under the GATS, one of the conclusions of Bhusan (2004) is to restructure
domestic regulations in order to protect domestic educational institutions only in
subjects and conditions. Chanda (2002) commented that given India’s limited public
resources to meet the growing education needs domestically, imports through modes
1, 2 and 3 are likely to play an important role in the future. Towards the same
direction Ahmad (2005) commented that in view of the volume of trade under mode 2
in trade in education services, India should actively participate in multilateral
negotiations on higher education within the GATS framework to seize new
opportunities that are available from the enlarged market. Further, only few like
(Chanda, 2003; Ahmad, 2005; and Amin, 2008) have highlighted the opportunities it
offers and very few indeed (Raju, 2006) have suggested commitment on higher
education to the GATS, with gradual liberalization (Tilak, 2011).
5.3 Mode-wise Trade in Higher Education Services
In the present era of globalization and a regime controlled by the World Trade
Organization (WTO), education is a service that can be traded through four different
modes recognized under the General Agreement on Trade in Services (GATS). These
are 1) Cross-Border Supply 2) Consumption Abroad 3) Commercial Presence and 4)
Presence of Natural Persons. The four modes are defined according to the location of
the provider and recipient. The liberalization process of each mode opens up different
sets of opportunities and challenges, though the modes are not mutually exclusive.
The diversity of opportunities and challenges stems from a certain inherent
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asymmetry in the comparative advantage intrinsic in the education sector of
developed and developing countries.
The status and potential of India for trade in transnational education through
these different modes is briefly reviewed in the paragraph that follows- Unlike
developed economies, India did not maintain separate trade in education services in
the Balance of Payments (BOP) statistics till 1998-99. After this period, the Reserve
Bank of India (RBI), started to compile trade in education services statistics but only
for payments (imports) given in figure 5.1.
Figure 5.1: India’s Imports (payments) of Education Services (US$ Million)
Note: * Partially revised; actual figures might be much higher.
Source: Reserve Bank of India (2008). Monthly Bulletin, February & Tilak (2011).
Due to this data limitation, study failed to categorise mode-wise trade in
education services. The latest release of accounts of India’s invisibles, the RBI shows
that India’s import payments under trade in education services in both 2005-06 and
2006-07 has crossed $1 billion, thereby contributing about 3 per cent of country’s
total payments towards services imports (Tilak, 2011). India’s import of education
services in 2004-05 increased by 171 per cent, compared to 2003-04, the highest ever
jump witnessed by the Indian economy in the category of education services trade. In
absolute value, it is estimated that, the total import (payments) under trade in
education services increased from US$ 61 million in 1999/2000 to US$ 2252 million
in 2009/10.
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5.4 Mode 1: Cross-Border Supply
The first mode includes the supply of education, “without” the movement of
consumers or providers (Raychaudhuri & De, 2008). It includes overall educational
materials, online courses through the internet and educational testing services.
Distance education programmes exemplify cross-border supply of education. It
contributes to globalization of education. Educational institutions of one country can
offer to the students of other countries the same courses which they offer to their
students through the means of distance education. India has 11 open universities and
102 centres of distance education in dual-mode universities. The possibilities of India
(or the other Asian Countries) importing education from the developed world, through
this mode, are low. On the other hand, some Indian universities have recently started
offering degree programmes, through the distance mode, in countries having a large
Indian Diaspora. The Indira Gandhi National Open University (IGNOU) is the prime
example and is offering programmes in both liberal arts and professional areas (see
Appendix 5.1). The competitive strength of IGNOU in marketing education
programmes abroad is its reputation, quality and low prices. IGNOU is already a
recognised distance education provider in the Gulf region-Dubai, Abu Dhabi, Sharjah,
Doha, Muscat and Kuwait. Its courses are being offered in Mauritius, Maldives,
Seychelles, Nepal and Srilanka. Staff Training and Research Institute of Distance
Education, IGNOU has also collaborated with the International Institute of Capacity
Building in Africa, (IICBA), Addis Ababa to provide distance education programmes
to students in Ethiopia and Liberia. Sikkim Manipal University is the largest private
sector provider of distance education, operating through a network of more than 750
learning centres in the country and 25 overseas centres in 25 countries, and enrol
more than 400,000 students (Ernst & Young/FICCI 2010).
Virtual university also represents true globalization of education. Under this
system, educational materials prepared by competent teachers in one country become
available anywhere in the world by internet. According to the National Centre for
Education Statistics of the US Department of Education, in the USA from 1994-95 to
1997-98 the number of distance education programmes via internet increased by 72
per cent. Several US Universities are active in online learning. Canadian Universities
are also active in this. In India, IGNOU & Birla Institute of Technology and Science
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(BITS) are offering such facilities (Sreenakandhay, 2003). However, technological
development has given scope for establishing on-line universities, such as St. John’s
University, which are fully accredited on-line universities. Many universities may be
finding this terrain very attractive.
This mode basically takes forms such as- conventional distance education
using print and audio-visual material. Mainly e-learning and courses offered on the
internet are covered in this mode (Powar, 2004). Distance learning on the internet is a
more recent phenomenon (Raychaudhuri & De, 2008). Internet education (or on-line
education) is a fast growing sector, which is creating a great market potential. Some
interesting projections on the size of the on-line education market across the globe
shows that on-line education or e-learning market will grow from $1.1 billion in 2000
to $11.4 billion in 2003 (Mehta, 2000). It would not be so far away when most of the
schools, colleges and universities will be having some or the other forms of online
learning. Stanford University, Columbia University, University of Phoenix,
University of London etc. are just a few examples of those universities who provide
on-line education. The Indian market for e-learning is expected to fetch about US$22
million (Sahni and Kale, 2004) and further it is expected to grow $280 million by
2012 (Dhopte, 2011). The market for such courses is expected to be large in India.
The success of these e-learning courses depends on the number of persons using
internet and IT-enabled services. In 2011, as per World Development Indicators, there
were around 10 persons per 100 which accounted to be around 250 million population
using internet services in India. Thus, this shows a high potential of e-learning market
in India. This indicates the expansion of higher education sector in terms of economic
power. Higher education is therefore identified as a priority sector by many countries
for GATS negotiations.
Cross border supply through the internet (virtual education) has immense
potential especially in disciplines like management and trade that have strong
international components. Some well known training institutes based in India offer
globally, further education programmes in professional areas like computer
application (software development). Likewise some foreign institutions are offering
programmes to Indian universities. National Institute of Information Technology
(NIIT) offers programmes in 144 countries where it also has study centres. However,
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it is difficult to estimate the numbers of students engaged in distance learning
although the expectation is that significant expansion has taken place with the setting
up of large-scale ‘open’ and ‘virtual’ universities. New information and
communication technologies have created new possibilities for distance learning with
the emergence of virtual education platforms.
Thus, it can be said that advances in technology can shift the means of supply
of service from physical delivery to virtual delivery. Developments in hardware,
intranets, internets, multimedia software and video-conferencing have created
tremendous potential for multiple site delivery and bring training to people’s work
sites (Mehta, 2000). With the entire above developments one can argue that
technology has revolutionized the education sector by facilitating development of
skills and knowledge, and reduced the information gap.
The comparative advantage in this mode of supply lies primarily with
developed nations because these countries are more advanced in technology and
people are more aware of latest technologies which are most suitable for successful
implementation of e-courses. It is more probable that when e-courses become
available on the net, the ones demanded most could be the ones that originate from
leading universities in the US or UK due to their global recognition. Such distance
learning courses would increase the participation rate of working professionals,
homemakers and students from non-metro areas. Students in metro areas may also opt
for such courses as an “add on” to their degrees. Looking at this opportunity, the
Indian Institute of Foreign Trade, New Delhi, a deemed university by status, has
started an e-learning programme through a Very Small Aperture Terminal (VSAT),
called Executive Masters in International Business (EMIB)1 ( Raychaudhuri & De,
2008).
By summing up, we can say that, cross-border e-learning activities are
growing at a faster rate. With the development of electronic commerce and a
corresponding expansion of distance learning as suppliers make use of new and
enhanced information and communication technologies, the potential of pure cross-
border trade in educational services (Mode 1), traditionally associated with (Mode 2),
1 Available from www.iift.edu. 142
and (Mode 3), is becoming more significant.2 Thus, Mode 1 is perceived to have a
very high potential of growth across the globe. Some believe that India has immense
potential to export its knowledge not only in traditional and classical disciplines such
as religious and cultural studies, Ayurveda, and Yoga, but also in modern disciplines
like computer sciences. Institutions like IGNOU (brief description of IGNOU is given
in Box 1 under Appendix 5.1), are already offering several programmes in distance
mode outside the country, in collaboration with partner institutions in countries such
as Afghanistan, Bahrain, Bangladesh, Ethiopia, Kenya, Kuwait, Kyrgyzstan,
Mauritius, Mongolia, Nepal, Oman, Qatar, Saudi Arabia, Singapore, Sri Lanka and
the UAE (Tilak, 2011). India is interested in mode 1 because trade through Business
Process Outsourcing (BPO)/ Information Technology Enabled Services (ITES) is
undertaken through electronic modes of delivery i.e. Mode 1. BPO/ITES and off-
shoring are likely to continue as major thrust areas from India’s point of view3.
5.5 Mode 2: Consumption Abroad
This mode includes the movement of consumers or students across borders. It
calls for physical proximity between consumers and producers. It is the most common
form of trade in the context of education services. It should be noted that a member
might only be able to impose restrictive measures affecting its own consumers
(students), not those of other members, on activities taking place outside its
jurisdiction. For e.g., if India opens mode II, then it may impose limitations with
respect to mode II on market access or national treatment that affects the students
coming from abroad to India (i.e., its own consumers). India cannot impose
restrictions affecting students going to say, US, for studies there. There is no doubt
that opening of mode II has various implications for higher education. Educational
institutions of developed countries have competitive advantages in relation to the
educational institutions of developing countries. Thus, if India makes full
commitment in higher education, then the educational institutions in India should be
such as to attract foreign students in India. Advance countries taking full commitment
2 E.g., Duke University in the US offers a “Cross-Continent” MBA programme that has a large on-line tuition component, allowing enrolment and participation of foreign students without requiring them to move to the US. “Internet-mediated learning” is combined with residential learning sessions in a number of the university’s facilities established abroad.
3 General Agreement on Trade in Services (GATS). Retrieved from www.Commerce.nic.in/trade/faqs_gats.pdf.
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in mode II have been able to attract foreign students and earn huge amount of money.
Since restriction under mode II by India does not restrain the flow of students to any
other country but only to its own country, so there is no point in restricting mode II.
Thus taking full commitment and developing institutions in India to offer world-class
higher education services may have immense potential to attract foreign students in
India (Bhushan, 2004).
Since, with the advent of free market economy in the early 1990s, the number
of students crossing their national borders for acquiring knowledge and skills has
steadily increased. Worldwide, in 1990 there were 1.2 million international students
and the number rose to 1.5 million in 1995 (UNESCO, 1997). At the turn of the
century the number was 1.8 million which increased to 2.1 million in 2004 (Altbach
& Basset, 2004). In 2009, it is estimated to about 3.3 million (GED, 2011). According
to an Australian study (Bohm, 2003) there will be about 8 million international
students by 2025. The trend shows that, largest component of international trade in
higher education services is students travelling abroad to study. Thus, from above data
one can understand that globalization increases global competition for the best and
brightest students, as more and more countries recognise the economic potential of
higher education as a service export sector. For the first time in history, in the era of
globalization, large segments of the world’s student population have truly access to a
‘global market place’ of higher education.
5.5.1 Trends in Inward Mobility
International students in India come from across the world which comprises of
developed, developing and less developed countries. The developed countries that are
technologically advanced and economically strong, and have good facilities for higher
education and training (e.g. USA, UK, Canada, Australia, countries of the European
Union, Japan), but send students for studying sociological, economic and cultural
aspects (as also Music, Visual Arts, and Performing Arts). The less-developed and
developing countries (South Asian Association for Regional Cooperation (SAARC)
countries and the countries of Southeast Asia, Western Asia and Africa) where
facilities for education, not only in the professional courses such as engineering,
medicine and management, but also in science, humanities, social sciences, commerce
and law, are limited (Powar, 2003).
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5.5.2 The Continent-wise Analysis of International Students in India
The continent-wise analysis of international students studying in Indian
universities during the period 1990-91 to 2008-09 is given in Table 5.1.
Table 5.1: Continent-wise Foreign Students Studying in India
Year Country
Asia Africa N + S+ Central
America
Europe Australasia (Oceania)
Miscellaneous* Total
1990-91 5741 6322 263 169 35 369 12899
1992-93 5083 7024 151 153 28 329 12768
1993-94 5862 7112 260 187 36 254 13711
1994-95 5011 5855 426 117 49 430 11888
1995-96 4831 4082 309 126 40 699 10087
1996-97 2735 2684 163 87 28 144 5841
1997-98 3005 2550 140 137 35 234 6101
1998-99 2739 2093 124 97 32 238 5323
1999-00 3496 2558 275 116 31 512 6988
2000-01 3866 2969 327 180 44 405 7791
2001-02 4312 2363 432 253 45 734 8139
2002-03 4452 1904 353 145 40 862 7756
2003-04 4822 1818 475 129 42 544 7830
2004-05 9849 2005 593 178 55 587 13267
2005-06 10493 2403 654 206 71 629 14456
2006-07 13400 3316 776 238 69 592 18391
2007-08 15437 3796 626 309 81 957 21206
2008-09 16004 4193 614 304 66 597* 21778 Note: (i) Data for 1991-92 are not available. (ii) *NRI/PIO – 371, Palestine – 39, Tibet 187 (2008-09). NRI- Non-Resident Indian & PIO
– People of Indian Origin. Source: Snehi (2010) & International Students in Indian Universities, AIU, Various Issues.
The continent-wise distribution of foreign students reflects that most of the
foreign students came to India are from Asian and African Countries. In 1990-91, the
number of Asian students in India was 5741 which was around 45 per cent of total
inward mobility of students. However, there has been a declining and fluctuating
trend over the years 1992-93 to 2003-04, which stood at 4822 in 2003-04. Despite this
declining trend, inward mobility from Asian countries gained momentum since 2004-145
05 which indicates a clear impact of Indian education system in Asian continent. In
2008-09, the share of Asian countries was around 74 per cent of total inward mobility.
Though African continent had a major share in total inward mobility but there has
been a continuous decline over the period with lots of fluctuation. This can be seen
from table that in 1990-91, 6322 African students came to India which decline to
1818 in 2003-04 and thereafter it showed a marked improvement but never touch the
level of 1990-91. In 2008-09, the number of African students in India stood at 4193.
Barring Asian and African continent, which had a major share almost 90 per cent,
other continents had registered a very low share in total number of foreign students in
India.
The American students do not have a very encouraging presence in Indian
universities. Although the number has increased from 593 in 2004-05 to 776 in 2006-
07, yet a declining trend was noticed in 2007-08 and 2008-09 with 626 and 614
students respectively. European continents showed a lot of fluctuations over the
period 1990-91 to 2003-04. But thereafter the number of European students has
increased from 178 in 2004-05 to 309 in 2007-08 with a marginal decline to 304 in
2008-09. The Australasian picture also shows a lot of fluctuation over the entire
period. The year 2007-08 shows highest number of students 81. On the other side, the
countries in the miscellaneous group have contributed in a good number during the
period of study with highest number of students registered in 2007-08 with 957
students which decline to 597 in 2008-09.
The data points out that on average nearly half of the foreign students came
from Asian countries, though their proportion has increased to around 2/3rd in the last
couple of years. Since 2005-06 onwards, the share of foreign students from Asian
countries in Indian universities has remained around 73 per cent while the number of
African students has steadily increased. Their population was the highest during the
mid- 90s, varying between 40-45 per cent. It was as high as 52 per cent in 1993-94.
Table 5.2 given below shows a comprehensive picture of continent wise students’
mobility during the period 1990-91 to 2008-09. There is a clear cut swing of students’
mobility towards India with 58.74 per cent students out of the total number of
international students are from Asia followed by 31.54 per cent international students
from African countries. However, very negligible presence of students from America,
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Europe and Australasia is found with 3.38 per cent, 1.52 per cent and 0.40 per cent of
students respectively out of the total international students in Indian universities in the
last 18 years. These figure clearly shows that, mainly foreign students came to India
are from the developing countries instead of developed countries.
Table 5.2: Continent wise Flow of International Students in Indian Universities during 1990-91 to 2008-09
Continent 1990-91 to 2008-09 Percentage
Asia 121138 58.74
Africa 65047 31.54
America 6961 3.38
Europe 3131 1.52
Australasia 827 0.40
Miscellaneous 9116 4.42
Total 206220 100.00
Note: (i) Calculated on the basis of data given in Table 1.
Source: Bhalla, V, 2002 & International Students in Indian Universities, AIU, Various Issues.
5.5.3 The Country-wise Analysis of International Students in India
The country wise analysis of data regarding the number of foreign students
studying in the Indian higher education institutions during the period (1990-91 to
2007-08) is given in Table 5.3, 5.4, 5.5 and (Appendix 5.2). The AIU is the only
organization that has been systematically collecting information on international
students in Indian Universities through regular questionnaires.
Higher education has always an international dimension. During the first and
to the eight century A.D Indian centres of learning, like Nalanda & Takshshila,
attracted students from distant countries including China & Korea. A glance at the
trend of international student mobility reveals that-during the last few years, there has
been a significant increase in the number of International students coming to India.
The number of foreign students in India was 3,510 in 1959 and peaked at 8,994 in
1969 and dropped to 7,217 in 1971 (Klineberg, 1976). But during the last two decades
the number of foreign students joining Indian universities has shown a steady increase
in enrolments till the mid-nineties. In 1995-96, the number of foreign students in India
was 10087, which nearly halved in the year 1996-97 and thereafter fluctuation trend
has been observed till 2003-04 (see Table 5.1). The decline in the number of students
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that started in the mid-1990s can be attributed to various factors including the
development of educational opportunities in their home countries, the ‘ageing’ of
infrastructure and its non-renewal during the process of massification of Indian higher
education. Further, developed countries especially USA, UK, and Australia were
aggressively promoting and marketing their higher education programmes. During
this period many other countries like France, Germany, Canada, and Netherland also
emerged as educational destinations for mobile students. However, the impact of
these initiatives resulted in an increase in the market-oriented delivery of higher
education across borders, often by institutions run for profit (Sanyal & Martin, 2006).
During this period India was not so much active like other developed countries in
marketing its higher education programmes and initiatives in this regard was also
lacking. The profile of sending countries reveal that students who were coming to
Indian universities were mostly from the neighbouring countries (Bhutan, Nepal and
Sri Lanka) and African countries (Sudan & Kenya) which had less developed higher
education system. These countries were also the ones which had a large Indian
Diaspora.
However, the trend being reversed only from 2001/02 onwards, when India
adopted a more positive approach, streamlining the visa regime, and allowing
universities & colleges to admit 15 per cent more international students than allowed
by their sanctioned intake (Agarwal, 2010). Association of Indian Universities (AIU)
has taken initiative in this regard by bringing together universities having
international programmes and highlighting the need for immediate action. The
universities must now act quickly otherwise they will be deprived of the many
opportunities that internationalization of higher education, and more specifically the
presence of international students, offers (Powar, 2003). Internationalization of higher
education is supplementing the public education system along with generating
revenue for the countries. Universities are again witnessing an increase in number of
international students from 2004-05 onwards. The number of foreign students in
Indian higher education institutions in the year 2008-09 was at the highest level of
21,778.
The participation of international students from countries like China and Japan
in the East Asian region remained stable while the number of students from Korea
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increased sharply in the year 2004-05 and it further increased during the next years.
Mauritius with its sizeable Indian Diaspora also sends large number of students to
India. Data analysis also reveals that countries representing the West Asian region4
reflected variations. The number of students from Jordan and Kuwait has started
increasing yet they sent lesser number of students as compared to countries like
Bahrain, and Yemen which have picked up in twenty first century. Enrolment of
students from Oman and Qatar has increased significantly. Participation of students
from UAE has increased steeply in the last three years. Thus in recent years, most
international students in India have come from the Middle East (Iran, UAE, Saudi
Arabia, Oman, and Yemen) (Appendix 5.2). This increase in foreign student
enrolment may be accounted for the fact these countries have a large Indian Diaspora.
Now, India’s potential as a global education destination has come to be
realized. A series of initiatives have been launched by the government to tap this
potential and to attract more and more international students to Indian institutions,
both private and public. The government in April 2002, constituted the Committee on
Promotion of Indian Education Abroad (CoPIEA). The CoPIEA monitors all activities
aimed at promoting Indian education abroad and will regulate the operation of foreign
educational institutions to safeguard the interests of the students and the larger
national interest as well (10th Five Year Plan). UGC has also responded to
globalization in a positive way. It has initiated a programme for the promotion of
Indian higher education abroad (PIHEAD), during the tenth five-year plan (2002-07).
Under this initiative, UGC has embarked upon a focussed nationally coordinated
programme to attract international students and to promote Indian institutions to offer
programme abroad (Chakravarty, 2007). Besides, Educational Consultants India
limited (Ed.CIL), has taken up schemes to promote Indian education abroad. It is a
public sector undertaking of the government, to act as a single window agency for
recruiting international students. It plans to attract students from Asian and African
countries and these are Ethiopia, Kenya, Sudan, Tanzania, Uganda, Iran, Bangladesh,
Nepal, UAE and Yemen etc,. Further, the government has launched an exclusive
scheme to encourage international students, called Direct Admission of Students
4 The countries which come under West Asian region are Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates and Yemen.
149
Abroad (DASA) reserving 15 per cent of seats in premier technical institutions, such
as National Institutes of Technology (formerly the Regional Engineering colleges)
and other centrally funded institutions for foreign nationals/peoples of Indian origins
(PIO)/Non-Resident Indians (NRIs). Besides this, a National Board of Accreditation
(NBA) has been established to ensure world class education.
In 2008, the Prime Minister Dr. Manmohan Singh constituted an inter-
ministerial committee headed by the former Director General of Indian Council of
Cultural Relations, regarding ‘Welfare of Foreign Students in India’. The
recommendations made by the committee regarding measures included making proper
advertisement in foreign countries about Indian culture, educational system, reputed
universities and courses offered by them, easing of the admission process, on-line
admission and urgent visa clearance for research scholars etc,. Detailed modalities for
the implementation of the measures are being worked out. Establishing of
International Students Centres in every university is the major suggestion for which
UGC is to provide funds to the universities and the responsibility of monitoring the
implementation of recommendations have been given to ICCR (Snehi, 2010). Thus, it
is apparent that initiatives to promote student mobility occupied a prominent place in
the government’s agenda. Despite much of the initiatives done by government, yet it
is not able to attract large number of international students to India.
5.5.4 International Students from High Income Group Countries in India
The number of international students from each of the top ten high income
group countries is given in table 5.3. In the globalised era, an analysis of country wise
participation shows that the share of high income countries in total foreign students is
not much high but their share has increased from meagre 6 per cent in 1990-91 to a
maximum level of 32 per cent in 2005-06. But from 2005/06 onwards, their share has
declined to 27 per cent in 2006-07 and further to 22 per cent in 2008-09. The year
2006-07, registered maximum number of foreign students 4975 from these countries.
The year 1998-99 registered minimum number of international students in India.
Among the high income countries UAE, USA, Oman, Saudi Arabia and
Bahrain are the major countries which send the maximum number of students in
India. Though the overall number of foreign students is still small, it has been
growing in recent years. 150
Top Ten Countries
Table 5.3: International Students from High Income Group Countries in Indian Universities
Country Year
1990-91
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00 2000-01
2001-02
2002-03
2004-05 2005-06 2006-07
2007-08 2008-09
Japan 23 27 34 52 46 45 50 38 43 48 65 51 63 68 77 67 83
UAE 40 49 39 47 25 27 23 26 94 68 56 68 1500 2034 1878 1560 1726
Oman 8 7 9 15 30 48 144 74 111 216 216 94 646 505 608 548 450
Saudi Arabia 70 45 38 69 25 8 14 5 18 44 31 36 419 551 771 835 1043
Kuwait 116 39 28 26 20 14 12 16 42 34 30 23 302 280 332 493 490
Bahrain 164 79 134 121 63 37 42 34 17 109 108 59 382 481 446 600 359
USA 198 106 201 362 251 129 102 87 223 240 331 244 398 483 615 396 419
UK 90 49 62 45 47 27 33 36 40 51 95 54 47 68 84 64 76
Canada 36 28 46 56 48 32 30 30 47 71 79 81 163 128 144 188 155
France 22 36 35 10 12 8 13 14 18 23 49 15 11 17 20 53 46
Total 767 465 626 803 567 375 463 360 653 904 1060 725 3931 4615 4975 4804 4847
Total No of Foreign Students in the year
12899 12765 13707 11888 10087 5841 6701 5323 6988 7791 8145 7756 13267 14456 18391 21206 21778
% share of top ten countries in total no. of foreign students
6 4 5 7 6 6 7 7 9 12 13 9 30 32 27 23 22
Max 198 106 201 362 251 129 144 87 223 240 331 244 1500 2034 1878 1560 1726
Min 8 7 9 10 12 8 12 5 17 23 30 15 11 17 20 53 46
Note: (i) Data for 1991-92 and 2003-04 are not available. Source: (i) Dr. Bhalla, V. (2002), (ii) Selected Educational Statistics, 2006-07 and (iii) Shah et al (2011). International Students in Indian Universities: A Trend Analysis. AIU.
151
The number of UAE students in India was only 40 in 1990-91 but it drastically
increased to 1500 in 2004-05 to 1726 in 2008-09 which shows that over the period
from 2004-05 to 2008-09, UAE accounts for about 47 per cent foreign students in
India. In 1990-91, only 8 students from Oman came to India and in 1997-98 it
drastically increased to 144 and after that there was a fluctuating trend. In 2004-05,
maximum number of students from Oman came to India for study. However, France
sends a negligible number of students to India. Most students coming to India from
advanced nations for pursuing only short-term study programs. For instance, the
number of US students in India increased from 198 in 1990-91 to 615 in 2006-07 but
declined to 419 in 2008-09. The small number is particularly striking in comparison to
the number of US students studying in other “non-traditional” study abroad
destinations such as China (11,064), or even Costa Rica (5,383) (Bhandari & Chow,
2008).
From the table, it can be stated that the Gulf nations among high income
countries are the major contributor of student mobility in India. In case of Canada,
there were 36 students in 1990-91, after that there was a somewhat fluctuating trend
up to 1998-99. Then it starts increasing and become 163 in 2004-05. Further it
declined in subsequent two years and in 2007-08, maximum number of foreign
students came to India i.e. 188. Again in 2008-09, number of students decreased to
155. This shows that India has not been proactive in attracting large number of
international students from high income countries, no doubt, it has potential to attract
students from foreign countries but its coordination, communication and recruitments
strategies are weak in comparison to other countries.
5.5.5 International Students from Lower Middle Income Countries
From table 5.4 it can be analysed that, Iran has been one of the largest sources
of foreign students in India. 1n 1990-91, the number of students from Iran in India
was 370 increased to 1120 in 2004-05 and further to 2,972 during 2008-09. However,
there has been fluctuation between the years 1990-91 to 2000-01, but after that
increasing trend has been observed.
152
Top Ten Countries
Table 5.4: International Students from Lower Middle Income Group Countries in Indian Universities
Country Year
1990-91
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00 2000-01
2001-02
2002-03
2004-05
2005-06 2006-07 2007-08 2008-09
China 12 6 14 28 27 21 23 28 18 20 16 19 34 51 87 219 873
Indonesia 18 17 64 58 33 35 63 106 68 96 62 58 51 83 89 77 89
Thailand 186 160 152 266 197 185 249 197 179 259 283 293 293 334 361 440 417
Iran 370 348 338 393 240 201 163 108 151 217 245 336 1120 1264 2180 2669 2972
Jordan 1506 1299 860 700 291 98 251 80 111 58 92 40 76 49 72 84 77
Bhutan 149 112 123 181 155 136 173 115 181 175 254 227 286 378 531 487 680
Iraq 49 27 26 6 4 9 20 23 41 41 24 15 16 41 116 241 230
Sri Lanka 540 487 420 369 363 348 420 368 485 383 504 391 582 530 466 997 742
Maldives 14 18 9 23 23 12 17 15 18 10 14 34 60 40 200 264 329
Nigeria 147 105 84 46 33 20 19 19 25 26 23 16 114 186 153 179 74
Total 2991 2579 2090 2070 1366 1065 1398 1059 1277 1285 1517 1429 2632 2956 4255 5657 6483
Total No of Foreign Students in the year
12899 12765 13707 11888 10087 5841 6701 5323 6988 7791 8145 7756 13267 14456 18391 21206 21778
% share of top ten countries in total number of foreign students
23 20 15 17 14 18 21 20 18 16 19 18 20 20 23 27 30
Max 1506 1299 860 700 363 348 420 368 485 383 504 391 1120 1264 2180 2669 2972
Min 12 6 9 6 4 9 17 15 18 10 14 16 16 40 72 77 74
Note: (i) Data for 1991-92 and 2003-04 are not available. Source: (i) Dr. Bhalla, V. (2002) & (ii) Selected Educational Statistics, 2006-07 and (iii) Shah et al (2011). International Students in Indian Universities: A Trend Analysis. AIU.
153
On the other side, a reverse trend is observed from Jordan. The number of
students from this country has steadily fallen from 1506 in 1990-92 to 77 in 2008-09.
Among the Lower middle income countries, after Iran, Sri Lanka is the second
highest feeder of foreign students to Indian universities, but there was a fluctuating
trends from 1990-91 to 2008-09. The year in which the highest number of students
came from Sri Lanka is 2007-08 (997). Thailand and Bhutan also sends the maximum
number of students in India. However, Thailand is taking keen interest in higher
education collaboration with India (Shah et al., 2011). There are some countries like
China, Iraq and Maldives which are sending only small number of students to India.
In 1990-91, China sends only 12 students, Iraq 49 and Maldives 14. However from
2004-05, the number of students from these countries has increased. Students from
Indonesia are although increasing, but their number is not impressive. In 2008-09 the
maximum number of students from these top ten countries came to India i.e. 6483 and
in 1998-99 minimum number of students from these top ten countries came to India
i.e. 1059. From table 5.4, it can be analysed that, the share of these countries
increased from 23 per cent in 1990-91 to 30 per cent in 2008-09, but there was some
fluctuations between these years.
The per cent of student coming from lower-middle income countries are
higher than those from higher income countries. Thus, this trend shows that India is a
much sought destination for less developed or developing economies.
5.5.6 International students from Low Income Countries
Table 5.5 reveal that, in the era of globalization, Kenya, Nepal and Ethiopia
occupy the top most slots of sending the maximum number of students with
Afghanistan, Vietnam and Tanzania following closely. Sri Lanka, Bhutan and
Bangladesh also have a large presence in Indian institutions of higher education.
Thus, from the data, it can be analysed that, Indian institutions of higher learning has
been attracting large number of students from neighbouring developing countries. But
at the same time (Agarwal, 2008a), analysed that India’s neighbours send a much
large number of students to advanced countries than to India. For instance, in 2006/07
Nepal sent 8,936 students to the US compared to merely 1,728 to India. In the initial
year of globalization, the proportion of students coming from top ten countries has
increased from 54 per cent in 1990-91 to 63 per cent in 1992-93 but thereafter there
154
has been continuous decline in number of students coming from low income
countries. The factors responsible for this decline are: (a) A lackadaisical approach of
Indian universities and a singular lack of effort to sell their programs; (b) Increase in
fee for foreign students; (c) Poor co-ordination between universities and Indian
missions abroad and failure to attract more foreign students to the country; and (d)
Arrival of international players, especially USA, Australia, Europe with its
aggressive marketing strategies and to some extent, New Zealand, in countries like
Bangladesh (Ahmad & Rizvi, 2007).
The year 1993-94 registered maximum number of students from these
countries with 8342. From the table it is clear that in the early stage of globalisation,
Kenya and Sudan sends maximum number of students accounting 3980 and 1657 in
1992-93 which declined significantly in 2008-09 to 371 and 347 respectively. Further
the table reveal that, in the initial era of globalization i.e., from 1990-91 to 1993-94,
number of students from Bangladesh has increased from 399 to 736, and then a
sudden drop in the year 1994-95 was noticed (129). In the year 1995-96, again
students from Bangladesh have increased to a level of 1244, which was highest of all
the years and again it declined in subsequent years. However, in some year i.e. in
1997-98 and 2004-05 some increase in number of students has been noticed. In the
year 2004-05, 940 students from Bangladesh were registered in Indian universities
and the number has been consistently declining since then. This may be due to the fact
that in the recent years, the Government of Bangladesh has given a serious thought to
the reform of the education system. Is has adopted several significant measures for
improvement of National Education Policy from primary to tertiary level.
The establishment of the Open University, the enactment of Private University
Act, the provision for private medical colleges and teacher training colleges are
breakthrough in the existing higher education system. One of the major developments
in Bangladesh has been the involvement of the private sector in expansion and
development of higher education, side by side in public sector. Another probable
factor for the decline of students from Bangladesh to India may be due to the
increasing trend of FDI in recent years which is considered as a welcome trend.
155
Top Ten Countries
Table 5.5: International Students from Low Income Group Countries in Indian Universities Country Year
1990-91
1992-93
1993-94 1994-95 1995-96 1996-97 1997-98
1998-99
1999-00 2000-01 2001-02 2002-03 2004-05 2005-06 2006-07 2007-08
2008-09
Afghanistan 113 125 111 100 118 105 84 59 46 35 33 24 35 65 422 976 1192
Bangladesh 399 565 736 129 1244 551 804 461 520 576 545 372 940 331 361 368 179
Nepal 651 725 909 863 695 463 563 574 772 821 873 801 1352 1411 1728 1821 1711
Kenya 3495 3980 4268 2951 2213 1246 992 639 868 968 526 521 418 523 621 592 371
Ethiopia 488 674 685 632 302 204 301 403 369 301 249 225 226 302 1033 1289 1937
Sudan 1521 1657 1294 1004 450 378 350 245 299 381 301 186 150 173 242 268 347
Uganda 60 57 98 297 275 183 208 196 199 241 128 93 70 65 62 58 48
Vietnam 46 32 27 33 26 56 90 88 86 82 84 142 210 254 313 229 185
Tanzania 67 50 82 328 191 99 49 38 65 71 78 68 123 222 303 366 324
Somalia 163 148 132 94 40 56 48 32 88 95 139 146 62 76 63 86 125
Total 7003 8013 8342 6431 5554 3341 3489 2735 3312 3571 2956 2578 3586 3422 5148 6053 6419
Total No of Foreign Students in the year
12899 12765 13707 11888 10087 5841 6701 5323 6988 7791 8145 7756 13267 14456 18391 21206 21778
% Share of top ten countries in total no. of foreign students
54 63 61 54 55 57 52 51 47 46 36 33 27 24 28 29 29
Max 3495 3980 4268 2951 2213 1246 992 639 868 968 873 801 1352 1411 1728 1821 1937
Max 46 32 27 33 26 56 48 32 46 35 33 24 35 65 62 58 48
Note: (i) Data for 1991-92 and 2003-04 are not available. Source: (i) Dr. Bhalla, V. (2002) & (ii) Selected Educational Statistics, 2006-07 and (iii) Shah et al (2011). International Students in Indian Universities: A Trend
Analysis. AIU.
156
From the study it is revealed that a large chunk of students from Bangladesh
prefer New Zealand as their desired destination for higher education followed by
Singapore and Malaysia (Shah et al, 2011). In 1990-91, students from Low income
group countries were 7003 which increased to 8342 in 1993-94 and after that there
was a continuous decline in number of students with lots of fluctuations. From 2006-
07 an increasing trend was noticed up to 2008-09. But students from these countries
never come at the level of 1993-94.
An Analysis of these three tables highlights the following points:
1. During the last two decades (i.e., 1991-2009), an analysis of country-wise
participation revealed that ten countries are contributing more than half (i.e., 56
per cent) of the foreign students studying in Indian universities. These countries
are Kenya, Nepal, Iran, Ethiopia, UAE, Sudan, Bangladesh, Sri Lanka, USA,
and Jordan. Out of these top ten countries, five belongs to Low income
countries, three belongs to Lower middle income countries and the remaining
two belongs to High income countries. This shows that maximum number of
students came from Low income countries which indicate that there is lack of
adequate and standard educational facilities in their countries. Thus, efforts must
be made to attract students from other parts of the world.
2. Kenya has been the top most feeders of foreign students to Indian universities.
In the initial years of globalization it is sending large number of students to
India, i.e., from 3495 in 1990-91 to 4268 in 1993-94, but after that there has
been a continuous declining trend up to 2002-03. Then, the number shows
increase from 418 in 2004-05 to 621 in 2007-08 and again it decline to 592 in
2008-09. This data analysis shows that, students from Kenya are not coming at
that rate which has attained in the initial years of globalization. Nepal is the
second highest feeder and its students number is also increasing from 651 in
1990-91 to 909 in 1993-94 and thereafter there was some what a fluctuating
trend up to 2002-03 then it is increasing constantly only with a sudden drop in
the year 2008-09.
3. The foregoing analysis shows that majority of foreign students who came to
India are from countries falling in Asian and African countries. However, it can
157
be stated that the Gulf nations among high income nations are also the major
contributor of student mobility in India.
4. The analysis reveal that, in the era globalization, there are some countries like
Bangladesh, Jordan, Kenya, UK, and Sudan are reducing their number of
students in India, either they are seeing more educational opportunities in other
countries.
5. The analysis further found that, in 1990-91 students from high income countries
were 767 which increased by 6 times to a level of 4847 in 2008-09. Students
from Lower middle income countries increased by only 2 times from a level of
2991 to 6483 during the above said period. Students from Low income countries
has not attained the position what it has achieved in the early years of
globalization i.e., 1993-94. In this year, there were 8342 foreign students which
declined to 6419 in 2008-09. This shows that students from high income group
countries are increasing at a faster rate. But the strength of the students from
High income countries is still less than the strengths of students from Low
income countries.
This shows that, India currently hosts a small number of international students;
the country has the potential to host many more. It will have to make an all out and
sincere effort to attract foreign students, for which an appropriate and clear cut policy
is needed and also serious and wholehearted initiatives in the desired directions.
5.5.7 University/Institution-wise Analysis of Foreign Students in Indian
Universities
University/Institution wise participation of foreign students is not uniform in
terms of institutions being attended by them. Table 5.6 reveals number of
international students in top ten Indian Universities from 2004-05 to 2008-09. During
this period, universities which registered maximum numbers of international students
were University of Pune followed by University of Mysore, University of Delhi and
Manipal University. In case of University of Pune, there is a consistent increase of
foreign students from 2004-05 and 2007-08 only with a drop in the number of
students in 2008-09. This shows that University of Pune has been able to attract
foreign students in a big way. The top ten universities account 16912 foreign students
in 2008-09. For instance, the University of Pune reported around 3507 foreign 158
students on their campus, and the University of Mysore has 1479 students in 2008-09.
At the very top is (IGNOU), Indira Gandhi National Open University (5861) students
in its programs in 2008-09. In 2004-05 it had only 963 foreign students but afterwards
it gained momentum. The number of international student in IGNOU has increased
steeply during the last couple of years specially after designing special information
booklets for students and by adopting a single window approaches. The data of other
universities show a varying number particularly in case of Symbiosis international
University, Pune. In this university, the number of students in the year 2004-05 and
2005-06 does not include the foreign students studying through Distance Education
Mode. But during 2006-07 to 2008-09, foreign students studying through Distance
Mode is included (Shah et al, 2011).
So far as total number of the foreign students during the past five year is
concerned, there is a clear increase in the number of foreign students. It may be due to
the fact that Indian universities are gradually preparing themselves to attract foreign
students. It is intriguing to note that many large, well-established universities like the
University of Mumbai, Calcutta University, and the University of Madras do not
figure in the top ten universities. Many universities do not have clear policies for
attracting foreign students, although UGC has launched a scheme to promote this and
universities are encouraged to participate in it.5 However, there are some universities
in which more than 100 foreign students are coming to India in 2008-09 and these are
Aligarh Muslim University (AMU), Aligarh (301), Jamia Millia Islamia, New Delhi
(218) and University of Madras, Chennai (404) etc.(AIU, 2011).
5 The scheme called Promotion of Indian Higher Education Abroad (PIHEAD) aims at marketing Indian higher education abroad, by offering formal degree programmes and short-term non-degree programmes specially designed for foreign students, as well as establishing campuses abroad. PIHEAD focuses on Middle Eastern, African, ASEAN, and CIS countries. According to the scheme, institutions will be free to fix their fee levels, which will be internationally competitive, and to use the revenues for the development of infrastructure for international students. The scheme is being executed by UGC in cooperation with Educational Consultants India Limited (Ed.CIL), FICCI, the Federation of Indian Export Organisations (FIEO), the Indian Council of Cultural Relations (ICCR), and the Association of Indian Universities (AIU). See www.ugc.ac.in/new_initiatives/promohe.html
159
Table 5.6: International Students in Top Ten Indian Universities from (2004-05 to 2008-09)
Countries Year
2004-05 2005-06 2006-07 2007-08 2008-09
University of Pune, Pune 2144 2455 3554 3807 3507
University of Mysore, Mysore
333 389 830 1312 1479
University of Delhi, Delhi 1003 1005 1417 1131 1224
Manipal University, Manipal
1130 1417 1325 1226 1224
Osmania University, Hyderabad
279 314 491 682 1167
Symbiosis International University, Pune (Enrolment under distance mode) of
1648 1610 2323 2178 1107
VIIT University, Vallore NA 76 43 20 454
Banaras Hindu University, Varanasi
NA 214 130 298 450
Alagappa University, Karaikudi
NA 1 12 568 439
Indira Gandhi National Open University, Delhi (Enrolment under distance mode)
963 3000 3925 4468 5861
Total 7500 10531 14050 15690 16912 Note: NA- not available.
Source: Shah et al (2011). International Students in Indian Universities: A Trend Analysis. AIU.
5.5.8 Factors Influencing International Student Flow in India
A study was conducted by NUEPA6 on ‘Foreign Students in India’ in order to
explore the experiences of foreign students regarding the education programs and
facilities in Indian higher education institution. The results obtained from this study
revealed that, there are number of reasons why international students prefer India.
These are as follows: - they see India as a destination for study abroad because of its
traditional and cultural heritage, lifestyle, safety, arts and cultural offer, low cost of
living, social sciences and currently the market oriented courses of medical and
engineering
6 Snehi, N and Wizarat, K. (2010), Report of research study ‘Foreign Students in India’. NUEPA, New Delhi, (mimeo).
160
1. Quality of Higher Education: one of the important motivations for students
seeking education abroad is the perceived high quality of education provided
by these universities. More than 3/4th proportion of the sample students
reported that they mainly look for better quality of education in order to
enhance their employability prospects in their home country. Another major
criterion for them was the recognition of academic degrees in the home labour
market and at the international level.
2. 1/4th of the sample students reported that the quality of teaching and learning
methods and the duration of study programmes are also important for deciding
their destination for study in India.
3. 1/3rd of students reported limited access to high quality education in their
home country or a lack of opportunities to specialise in their subject area.
4. Cost of education: is also an important factor for influencing students to study
in India. The cost of higher education-fee levels and living expenses is
comparatively lower in India as compared to other developed countries.
5. Differences were found in country-wise preferences for studying in this
country. Middle East and African countries are mostly self-sponsored and
have come for personal development and personal interest. While students
from Sri Lanka reported that they have joined Indian universities because
English is the language of teaching and also because the time taken to
complete particular course is less than in their own country.
6. Another factor which influences students for choosing India as destination was
to gain social and cultural experiences, as 3/4th of sample students came to
study in India as part of Study Exchange Programs.
7. Choice of Educational Programmes: 1/4th of the sample revealed that they
came for short term courses (varying between 5 to 12 months) and had come
through “student exchange programme” or for completing a mandatory term in
the educational program etc. While those from the neighbouring countries like
Nepal, Bhutan, Bangladesh, Sri Lanka, Pakistan and others have enrolled for
full time undergraduate/post-graduate degree courses including research in
various subjects ranging from English, B.Com, Fine Arts, Political Science
161
etc. Students from Taiwan, Thailand and Vietnam mostly opted for Buddhist
studies. However, these differences in the student choices reflect the various
needs in terms of the educational programs offered.
Thus, these are the factors which motivate international students to study in
India. In choosing foreign destination, students opting for international education
have three important considerations- cost, proximity, and overlap with their cultural
values. In this context India offers a friendly environment, cultural diversity and good
value for money to students from SAARC, Middle East and South East Asia.
Considering these advantages, India has the potential to become one of the world’s
major higher education destinations.
5.5.9 Trends in Outward Mobility
Educational exchanges in contemporary India started in 1950, soon after the
country gained independence. Large numbers of Indian students and scholars went to
the US, UK, and Germany (Klineberg, 1976). In addition, an educational exchange
link was soon established between India and the USSR, which was solely driven by
the political rationale (Shivkumar, 2001). The overwhelming desire on the part of
Indian students, with their parents encouraging them, to acquire a foreign degree led
to large numbers of Indian students going abroad, as well as making India a big
market for foreign providers. Table 5.7, shows the growth in the numbers of Indian
students studying abroad from 1990 onwards. The number of Indians who leave the
country to study abroad has increased over the years.
The total number of Indian students who went abroad for higher studies was
3,190 in 1955 and remained almost constant throughout the 1960s, at a level between
10,000 and 13,000, but took off in the 1990s and reached to 42,270 in 1995, 139,356
in 2005 and 200,432 in 2011. It should be noted that the period in which the number
of Indian students abroad took off coincides with the opening up of the Indian
economy in 1991 (Gürüz, 2008). Thus, the above data shows that the liberalization of
the Indian economy, a process that began in 1991, is certainly a major factor behind
the large and growing numbers of Indian students seeking or studying abroad. Prior to
the 1990s, only few rich and intellectual elite families afforded to send their children
to universities outside of India, but with the dramatic rise of a new Indian middle class
(and increased wealth of the Indian upper class), the number of students able to 162
pursue foreign education has skyrocketed. For e.g. the number of Indian students
studying in the US grew by more than 56 per cent from 1990 to 2003 (Arnold, 2001).
This shows that, globalization is the most visible aspect of student mobility. With
globalization there has been a steady increase in the student mobility across the world.
Table 5.7: Indian Students Studying Overseas
Year No of Indian Students Abroad 1990 24,850 1995 42,270 2000 55,929 2001 66,587 2002 87,978 2003 112,228 2004 123,559 2005 139,356 2006 139,459 2007 153,312 2008 170,256 2009 195,107 2010 200,621 2011 200,432
Source: UIS, UNESCO-Global Education Digest (GED), Various Issues.
In just over 22 years there has been an 8-fold increase in the number of Indian
students abroad, from 24,850 in 1990 to 200,432 in 2011. Currently, Indian
constitutes 7.5 per cent of the world’s mobile students, the second largest group of
students from a single country (after China), (Agarwal, 2010).
In 2010, India sent 103,968 students to the US against only to 20,429 to
Australia, 38,205 to UK followed by New Zealand 6650 and Canada 4617 (GED,
2012). The three main destinations countries USA, UK and Australia experienced a
spectacular growth in Indian students, hosting almost 85 per cent of all Indian
students abroad. Indian students make up the largest group of overseas students in the
U.S., which is the top destination country for Indian students. They also form the
second-largest group of overseas students in the UK and Australia. Foreign degrees
are a huge lure for many in India, as in many other developing countries. More than
70 per cent of the students go from India to countries like the USA for masters and
doctoral degree programmes. Only small proportions go for undergraduate studies.
163
Similarly a large proportion of students choose management and engineering courses
of study; very few opt for humanities and social sciences. For example, out of 1,757
students who went to France in 2008, 60 per cent took management courses and 30
per cent engineering courses (Tilak, 2011). Most of the students go abroad under the
scholarships offered by foreign governments under cultural exchange programme and
teaching & research assistantships and some go at their own cost (Sreekandhay,
2003).
The above study shows that, education services are traded primarily through
student mobility across borders (consumption abroad). The biggest traders in
education are reported to be the USA, UK, Australia, New Zealand and Canada, none
of which expect outsiders to make incursions into their turf. Compared with 625,000
foreign students studying in the USA, hardly 50, 000 US students went abroad in
2008; the respective figures are 342,000 and 22,000 for the UK, 231,000 and 10,000
for Australia and 32,000 and 4,000 for New Zealand (UIS, 2010). The present
experience shows that the advanced countries are the main beneficiaries of
globalization of higher education. It is obvious that these countries will be able to
exploit their advanced infrastructure and qualified teaching staff, research
infrastructure, libraries etc. to export educational services to the poor countries, and
will emerge as the net winners in the whole game (Tilak, 2011). The US is the
greatest beneficiary of this phenomenon where education is ranked fifth amongst the
services exported.
The total value of education exports of the five largest exporting countries
(USA, UK, Australia, Canada, and New Zealand),7 on which data are available, to
mostly developing countries was estimated to be above US$28.3 billion in 2005, with
the USA accounting for 50 per cent, followed the UK (21 per cent), and Australia
(nearly 20 per cent) (Bashir, 2007). The USA is the leading exporter of education
services and commands approximately 1/3rd of the total world market for higher
education services8. It is important to note that the export value of educational
services in a country’s balance of payments is not confined to tuition fees, but rather
7 Many of these are English-speaking countries, whose higher education systems are generally believed to be good and which use English as the medium of instruction.
8 The 10 leading exporters of higher education services (consumption abroad) are the USA, France, Germany UK, Russian Federation, Japan, Australia, Canada, Belgium and Switzerland.
164
extends to all the living, travel, and other expenses in the host country. This is true
even when international students are subsidized (Tilak, 2011).
The analysis of the facts discloses following points:
USA9 has one of the best policies for internationalization of higher education
and that is reflected in commercial gains as well. The attractive features of this
country, making it best choice for student destination are English speaking
country, financial assistances in higher education, job opportunities after
courses, and very high standards of teaching and research in the universities.
UK has its internationalization of higher education policy supporting almost 100
per cent free trade in education service. The country does not impose any major
restrictions on the institutes, rather promotes the trade. This policy lets the doors
open for institutes to have own strategies to attract overseas students. Further,
the British Education Council nicely represents UK universities in various
countries and facilities the students seeking admission.
The drawbacks in UK higher education environment are: very high level of fee
for overseas students, almost no jobs after completion of a course and a low
level of social acceptance. As compared to the USA, in UK grants and
scholarships are very few. If these drawbacks are reduced, its market can still go
up.
Australia10 is an emerging winner in attracting a large international student
community. The main reasons are: good quality of education, English speaking
country, and government’s decision of allowing free trade in education. The free
trade policy had a very good impact and the institutes could quickly encash upon
the good quality of education and research. Added to it is good visa support and
information regarding institutes available in the embassies, make it a trouble-
free destination.
Thus, the above analysis shows that trade in higher education services has
emerged over the last few years as a major economic sector worth several billion
dollars for exporting countries such as the US, UK and Australia. In recent years,
9 In the USA, the higher education exports had reached US$17.8 billion in 2008 (Varghese, 2010). 10 International education is the third largest export for Australia, contributing US$ 12 billion to the
Australian economy in 2008 (Adam et al, 2011). 165
Asian neighbours including China, Singapore, and Malaysia have began to attract
significant numbers of Indian students. These three countries host more than 6 per
cent of Indian students abroad. If the significant numbers of students studying in the
UAE, Qatar, and Nepal (where an Indian private institution has set up a campus) are
included, it would go up even higher. Indian students are now going to all the worlds’
important destination countries in increasing numbers, with the most significant
growth occurring in New Zealand, Sweden, Cyprus and Ireland. Two important
traditional destinations, Canada and Germany, also continue to attract a large number
of Indian students. All countries that plan to enter the increasingly competitive
international student market see India as an extremely lucrative market and have
began to make inroads (Agarwal, 2010). While most of the students go to the
universities in the West, Indians now find universities in Singapore and Malaysia
equally good, less expensive and closer home. As a result, the number of Indian
students in these countries has increased fast over the past couple of years (Agarwal,
2009).
Thus, it is clear from the above study, that colonial ties no longer play a role in
Indian student’s choice of a country by destination. Rather it is the quest for a better
education and more recently, employability in the global labour market, and the desire
to establish strategic personal links and networking, that are now the main drivers of
the international mobility of Indian students. Assuming an average expenditure on
fees and maintenance as US$ 25,000 per year, the outflow per year will be about US
$7.5 billion. Many policy makers and educationists believe that if foreign investment
in higher education is permitted it will help to save this amount of outflow of funds,
besides providing foreign education at lower cost than studying abroad. It is argued
that the establishment of foreign campuses in Indian soil would, substantially decrease
the outflow of foreign exchange in India (Anandakrishnan, 2010).
The (NKC) National Knowledge Commission (2007, 2008) pleads for
allowing foreign institutions to come to India and provide incentives to good
institutions and disincentives to substandard institutions, as this will reduce the
outflow of Indian students to study abroad, resulting in substantial savings in foreign
exchange. The NKC also recommends that Indian institutions be encouraged to create
campuses abroad and has advocated special efforts to attract foreign students to India.
166
It argues that India should increase number of foreign students in Indian universities
to at least 50,000 because if every one of them were charged US$10,000 per annum,
this would bring in the substantial amount of US$0.5 billion11. Apart from savings to
the public exchequer, NKC argues that all this would improve competition, provide
more choices to students, and contribute towards reaching higher levels of academic
excellence.
Some initiatives are already being taken to attract more and more foreign
students, such as easing of entry/visa regulations for foreign students, Indian missions
abroad providing personalized counselling services to students seeking to come to
India for studies, empanelling of a cadre of registered trained agents for foreign
students, and building of international student centres in universities12 that will work
as nodal points to assist foreign students in each university. The government’s
intention is to make India a global knowledge hub (‘Easier visas’, 2009. See also
Planning Commission, 2011).
5.6 Mode 3: Commercial Presence
Commercial presence like consumption abroad maintains physical proximity
between the services providers and its consumers. Trade under this mode includes
local branches of foreign institutions as well as joint ventures set up by one country in
another member country. In India, foreign participation is permitted through twinning,
collaboration, franchising and subsidiaries (Raychaudhuri & De, 2008). In twinning
arrangements, two institutions together provide a service. Here one of the actors is
from abroad. The partner from abroad validates the instructional methods and
examination standards of the domestic institutes. The certificates are issued by the
foreign partners e.g., the Art and Design Courses by London Institute UK has
twinning arrangement with Colej Bandar Utama in Malaysia (WTO, 2000d).
Twinning and franchising arrangements go hand in hand with the emergence
of the private sector in higher education (Varghese, 2006). For example, Universities
from Australia have entered into an arrangement with countries in Asia and Africa to
encourage students from these countries to pursue their education in an Australian
institution after having completed the first part of their graduate’s studies in their own
11 Some might argue that if US$ 10,000 were charged per student per year, very few students would come to India, as it might be much cheaper to study in advanced countries.
12 UGC provides assistance to universities for constructing residential facilities for foreign students. 167
country. The collaboration between Cambridge University in the UK and
Massachusetts Institute of Technology (MIT) in the USA is a good example of a joint
venture of equals. The Columbia Business in New York and the London Business
School has taken the initiative to align with HEC13, Paris and LSE (London School of
Economics), London to launch the Trium Executive MBA Programme. The
University of Chicago has campuses in Barcelona and Singapore (Varghese, 2008).
An important mechanism which helps in improving the quality of education is
through collaboration at the inter-institutional level. This normally results in the grant
of dual degrees or joint degrees. This is a form of commercial presence that needs to
be encouraged (Powar, 2004). However, these arrangements shows that there is a
change in mode of supply from consumption abroad to commercial presence, hence
leading to reduced movements of natural persons for acquiring knowledge and skills.
According to the (OECD) Organization for Economic Cooperation and
Development (2004), liberalization of mode 3 (commercial presence) may reduce the
number of students going abroad. Though the best universities are considered to be
the ones in OECD countries, now India and other countries in South-East Asia have
also been attracting overseas students over the last decade. Countries such as India
spend around US$4 billion in foreign exchange on Indian students studying abroad or
importing education. It is argued that the country could save this amount of foreign
exchange, if the students had stayed within India and received foreign education
(Tilak, 2007a). Thus, such thinking promotes institutional mobility more than student
mobility (Varghese, 2009).
Establishing Campuses Abroad and Partnership in Higher Education are now
becoming an important means of globalization of education. Many Indian Universities
have entered into (MOUs) with universities of other countries particularly for research
programmes. This is now accepted as an important means of promoting excellence in
teaching & research (Sreekandhay, 2003). The recent development in the field of
higher education in India could be termed as encouraging, since a number of
developed countries particularly that of Western European nations have shown their
interest to have greater educational linkages with India. A number of Memorandum of
Understanding (MoU’s) with our higher educational authority i.e. Ministry of Human
13 HEC (Hautes etudes Commerciales de Paris) is one of the foremost business schools in France & Europe.
168
Resource Development (MHRD), University Grants Commission (UGC) on one hand
and growing linkage of our higher education institutions with that of foreign
institutions on the other may be sighted as most fitting example. UGC and the
Deutsche Forschungsgemeinschaft (German Research Foundation), herewith
conclude a MoU on scientific cooperation with a common aim of strengthening
cooperation between the researchers of universities in both countries in all fields of
sciences, humanities and social sciences. Bilateral cooperation in the field of
education and research has been institutionalized through a (MoU) on an Indo-French
Educational Exchange Programme (IFEEP) signed in 2007 which is monitored
through a Joint Working Group (JWG) between the Ministry of Human Resource
Development in India and the French Ministry of Foreign Affairs (Rahman et al.,
2012).
Indian higher educational institutions may offer programme or a qualification
degree abroad and may allow outside educational institutions to offer educational
programmes and qualifications. Indian institutions established abroad could generate
foreign exchange; earn prestige for Indian educational capabilities; and help Indian
faculty develop broader academic perspectives. Foreign institutions established in
India; introduce new teaching and learning methods; attract foreign investments. At
the same time they can also create duality of quality and standards, so access
commitment for mode 3 should be governed by regulatory procedures for
registrations, approval, recognition, accreditation, legal status and liabilities
(Anandakrishnan, 2004).
India has some competitive advantage in certain fields of education such as
Yoga, Ayurveda and Sanskrit. Besides it has also the potential to develop many areas
such as engineering, management, medical institutions or their branch campuses
abroad. While before providing any commitment of trade through this mode, we must
assess our strengths and weaknesses in different disciplines. We must open up those
sectors in which we have comparative advantage, so that we can reap more benefits.
There must be restriction on the sectors which are weak but quality institutions by
foreign educational institutions must be encouraged in these areas. One limitation that
countries like India should impose is that only public education providers should be
permitted through this mode. Of course developed countries want this mode so as to
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exploit the market of developing economies and therefore prefer to have minimum
limitations or restrictions to be imposed by developing countries. For example, MIT in
US is in the process of establishing a locally financed subsidiary of its faculty of
engineering in Malaysia (Bhushan, 2004).
However, there is a scope for developing high-value niche market for some of
the programmes that India may offer. Marketing of programmes on education in Arts
and Culture, Sanskrit and other languages and literature, and traditional medicinal
sciences like Ayurved could be effectively done by upgrading the campus facilities for
some of the specialized institutions in India. A glaring example of this is the
programme offered in Ayurved by the Department of Ayurved at University of Pune.
It has twinning agreements with universities in Italy, Germany and many other
countries to send their students here for part of the study (Deodhar, 2001). While
institutions like the Indian Institutes of Management are not clearly allowed by the
government to go abroad, quite a few private and public institutions are already
trading education under Mode 3 of the GATS. For example, the Birla Institute of
Technology and Sciences, Pilani and Birla Institute of Technology in Ranchi have
already established their campuses in Dubai and Oman respectively. The Manipal
Academy of Higher Education has already set up offshore campuses in Nepal and
Malaysia, and Delhi Public School Society in as many as 13 countries (UNTACD
Team, 2005). Mumbai’s S.P Jain Management School has set-up branches in Dubai
and Singapore to offer MBA courses. Some public institutions like University of
Delhi, IGNOU, Shreemati Nathibhai Damodar Thackersey (SNDT) Women’s
University, Mumbai, Mysore University, Mysore and Madras University, Chennai are
making their presence felt abroad (Raychaudhuri & De, 2008). There are good
prospects of popularizing Indian education abroad by enlarging the participation of
Indian universities through pro-active policy measures. Thus, all these show that India
has great potential in its export of education services. It is also an encouraging aspect
from the Indian viewpoint is that the deemed universities are now permitted to open
institutions/ campuses abroad.
At present, many countries including US are only looking inwards as far as
secondary education is concerned. Indian proposal should include scope for
commercial presence of institutions in the secondary education. Central Board for
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Secondary Education (CBSE) has opened several secondary schools in the Gulf and
other Central and West Asian countries. Till 2005, there were more than 100 (Indian)
CBSE schools in overseas. With ever increasing Indian Diaspora spreading rapidly all
over the world, there would be a great demand for CBSE-like schools in UK, USA,
Fiji and many parts of the world. As far as establishing institutions of higher
education abroad is concerned, India’s competitiveness is very much in doubt as she
need to address the core issues of capital expenditure requirements. In fact, domestic
higher education problems are addressed first to stay import-competitive. However,
one exception must be brought to our notice. Central Institute for English and Foreign
Languages, Hyderabad has successfully started an English Language Teaching (ELT)
programmes in Kyrgyzstan. The institute won the contract in succession although
there was strong competition from other countries (Kolhatkar, 1999). India must
capitalize on such experiences and duplicate the efforts elsewhere.
With the advent of globalization, foreign providers started entering higher
education market in India offering degree programmes mainly in the professionals.
The first entrants included an unaccredited ‘university’ from the US, further education
institutions from the UK and a university of poor academic standing also from the UK
(Powar, 2004). Realising the danger posed by such foreign providers to the Indian
higher education system the UGC and the AIU, in the mid-nineties, prepared draft
regulations for controlling the operation of foreign providers. Though accepted in
principle by the Dept of Education, MHRD, no concrete-follow up action was taken.
Hence acting on its own, AIU formulated and issued guidelines regarding the grant of
equivalence to degrees offered in India by foreign Universities (AIU, 1999). In April
2003, the All India Council for Technical Education (AICTE) issued Regulations
relating to entry and operations of foreign universities/ institutions imparting technical
education in India (AICTE, 2003). These Regulations were modified and reissued in
May 2005. Subsequently, the Government of India introduced in 2007, ‘The Foreign
Educational Institutions (Regulation of Entry and Operation, Maintenance of Quality
and Prevention of Commercialisation) Bill, 2007 (Government of India, 2007), which
could, however, not be enacted and a modified version, ‘The Foreign Educational
Institutions (Regulation of Entry and Operation) Bill, 2010 was introduced. Presently
this bill is being discussed in parliament, and in various fora throughout the country
(Powar, 2010). 171
The 1990’s saw the emergence of foreign universities in collaboration with
private institutions in India. In the absence of any centralized policy or regulatory
regime in the country, there is no reliable statistics about the number and mode of
operation of such foreign education providers in the country. A research study
conducted by National University of Educational Planning and Administration
(NUEPA) (formerly known as the National Institute of Educational Planning and
Administration) on ‘Foreign Education Providers in India’ (2005) brings out some of
the salient features of their operation. According to the study, there were 131 Indian
institutions collaborating with foreign institutions. Information also shows only few
countries are actively involved in collaborating with private institutions in India. Only
USA and UK have shown their interests in making collaboration with Indian Partners,
59 institutions partnered with UK universities and 66 institutions partnered with US
universities, mostly second-or third-tier institutions in their academic standing.14 No
top-notch foreign universities have been attracted to India (see Paul, 2009). However,
there are other potential countries such as Australia, New Zealand and Canada who
are constantly watching the developments and the governments stand on any
regulation regarding foreign education providers.
In this report, majority of the Foreign Education Providers provide
professional/ vocational courses. Out of the total sample of 131 institutions in India,
107 were providing for vocational courses, 19 for technical course and only 5 for
general education. The data shows that in the category of vocational courses-
management courses were the most popular. Business Management and Hotel
Management constitute approximately 80 per cent of the total number of courses. The
geographical distribution of these programmes was uneven: Maharashtra had the most
programmes in hotel management, for instance, Delhi had the most in business
management.
14 Such universities include Maris University, Maharishi Institute, Marshall University, Andrews University, and Montclair State University in the USA; Heriot-Watt University, Dudley College, Wigan & Leigh, and Northumbria University in the UK; and Waltham Forest College, Western International University, Grambling State University, Clark University, Liverpool John Moores University, Coventry University, De Montfort University, Oberlin College, Mount Holyoke College. Few details are available on these and many other foreign providers in India. See also Powar and Bhalla (2006).
172
Further, AIU conducted a project report on ‘Foreign Education Providers in
India’ for the period of January to June 2010 and found that about 635 foreign
institution/universities have advertised, directly or indirectly, during the six month
period which involves in providing higher education in India. This includes a total
number of 440 foreign education institutions from more than 30 countries, mostly
from developed countries, have advertised (Advertisements published in 16 main
news papers) for recruiting students from India in a wide range of courses. However,
five countries namely, UK, USA, Canada, Australia and New Zealand, still dominates
as far as number of FEPs are concerned. Together, they constitute more than eighty
per cent of the institutions. In this report, it has been also found that, more and more
new players (FEPs) have been emerging. Even institutions from smaller countries
particularly, that of Western Europe have been advertising vigorously to attract the
students for their home campuses. The number of advertisement from the institutions
of Asian countries like China, Japan, Singapore, Malaysia, Oman and UAE also make
their presence felt. The data also reveal that most of the institutions advertising to
enrol the Indian students at their home campuses are second grade institutions. No big
names were appeared that advertised to enrol the students (Rahman et al., 2012).
Table 5.8 given below, shows the different types of Foreign Education Providers
operating in India.
The number of foreign institutions offering degree under the twinning
programmes as the data indicates was 54 in June 2010. Moreover, the number of
foreign institutions having programmatic collaboration with the Indian Institutions
was 60. The study on the nature of FEPs under the twinning and programmatic
collaboration reveals that the situation of Indian institutions having twinning
arrangement with FEPs is a little bit better than the institutions having programmatic
collaboration. However, the largest number of programmes is offered under twinning
arrangements, one of the preferred methods for foreign institutions to attract
international students to the home country. Twinning is a relatively cheap option, as a
part of the programme is undertaken in the host country and it does not require huge
additional investments by the foreign providers or by the Indian partner.
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Table 5.8: Classification of Foreign Education Providers (FEPs) in India January1 –
June 30, 2010.
SN. Types of FEPs Total Number
1 FEPs Operating in their respective Home Institution
440 (69.30%)
2 FEPs Operating in India -Own Institutions -Programmatic Collaboration
04 (0.63%)
60 (9.50%)
3 FEPs under Twinning Programme 54 (8.50%)
4. FEPs under other than Twinning/Programmatic Collaboration
77 (12.20%)
Total 635 Source: Association of Indian Universities (AIU) database-January - June 30, 2010.
The least important mode chosen so far is setting up of campuses in India by
foreign universities, which involves an inflow of FDI in education to India and the
establishment of institutions. This mode is preferred by the government as it reduces
the outflow of students for study abroad and the corresponding outflow of money to
other countries in the shape of fees and related expenditure, apart from the inherent
attractiveness of FDI in the form of foreign capital. One hundred per cent FDI in
higher education in India is now allowed by law under the ‘automatic route’. But this
is the least preferred mode, as opening a branch campus requires huge investments in
infrastructure. None of the 131 foreign education providers have set any campuses of
their own in the country, although some have entered through joint ventures. While
some foreign universities have evinced interest in setting up campuses in India, so far
there is no case of this kind.15 In the case of quite a few, it is not clear whether they
15 There has been only one instance of a foreign investor coming to India, which was a disastrous experience. The investor was a US-based private commercial institution, Sylvan Institute, which came to offer higher education programmes in Hyderabad. The Institute had an office in Malaysia, and it offered this programme from there. Sylvan got 125 acres of land at a subsidized rate from the Andhra Pradesh Industrial Infrastructure Corporation to float the South Asia International Institute in Hyderabad. Despite the support from the government of Andhra Pradesh, it folded up its operations in India within a year, leaving students, faculty, and everybody else in the lurch, citing a hostile regulatory climate. It was a disaster (Blumenstyk, 2004). Two other institutions, which can be described as top-tier, also came in through their commercial wings. One was Carnegie Mellon University in Pittsburg, and the other the Illinois Institute of Technology in Chicago, which offered postgraduate engineering degree programmes. These were also failures, because the fees were very heavy and the programmes were not able to attract enough students. See Anandakrishnan (2006).
174
are offshore campuses of a foreign institution, franchise institutions, operating under
twinning arrangements, or independently operated institutions (Tilak, 2011).
Moreover, it was noticed that more than 50 per cent of Indian institutions
under the collaborative and twinning arrangement are having either no affiliation or
their course were not approved by the concerned agencies/authorities. Even though, it
is mandatory for every Indian institution to have institutions affiliation with their
courses. But lack of coordination between affiliating agencies and corporate world
results in making such provision un-authoritative (Rahman et al, 2012).). The
situation is likely to continue in the coming future till the envisaged FEP bill takes a
shape and gets implemented. The Foreign Education Providers (Regulations of Entry
and Operation) Bill, 2010 is based on the rationale that there exists a large demand for
higher educational institutions in the country and the government does not have
adequate resources to meet this growing demand. Therefore, allowing foreign
education providers to come and operate in the country will expand the higher
education sector and help increase access. The bill also envisages allowing reputed
and quality foreign universities and educational institutions which will improve the
overall quality of higher education in the country through increased competition.
Besides, foreign educational providers have been operating in the country through the
foreign direct Investment (100 per cent) route since 2000. However, by bringing
legislation, their operations can be regulated and it will set minimum quality standards
for entry of any aspiring educational provider to India (Shah, 2010).
Foreign Educational Institutional Bill: The Foreign Educational Institutions
(Regulating of Entry and Operations) Bill, 2010 aimed at regulating the entry,
operations and standards of foreign education providers, providing quality assurance,
preventing commercialization, protecting students from fly night operators and
promoting educational tourism. The operation and entry bill sought to give permission
of foreign universities to establish their campuses in India after fulfilling certain
criteria i.e. having 20 years working experience in the country of origin, accredited by
the concerned authority in the home country. The intended FEPs must register itself
with a designated authority and would be scrutinized by a team of experts here in
India. They also need to deposit a sum of money as security and they are not allowed
to take away the earned money rather it must be invested in the infrastructural
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development of the campus (Rehman et al, 2012). The Bill has a safeguard clause
under which the Govt. can reject an application of a university if it feels that the
venture will have adverse impact on national security (Shah, 2010).
There are some positive and negative implications of opening mode III is
given: Some of the negative implications of opening mode III may be pointed out (1)
Commercial presence may entail welfare distortions. Usually foreign institutions tend
to give better and more attractive packages to their staff. This allows them to employ
the best leaving the others to share the rest. Consequences may be the creation of
wage havens employing and retaining a very happy few while at the same time
creating conditions for internal brain drain; (2) Foreign Institutions can create duality
of quality, standards and access; (3) There may be the rise of inefficient and
languishing public sector and a dominant private sector; (Powar, 2002a); and (4) The
presence of foreign providers signals to government that they can decrease public
funding for higher education, thereby jeopardizing domestic publicly funded
institutions (Anandkrishnan, 2004).
On the positive side the following implications of inflow of foreign
institutions in India are pointed out: (1) Possibility of stopping outflow of students.
(2) Study programmes will be cheaper in relation to foreign degrees earned abroad.
(3) Diversification of study programmes. Of course this diversification is a very
limited one and (4) Process of integration of an international dimension into the
teaching/service/research functions, competitiveness will be promoted and it has
implications on the foreign exchange as well (Bhushan, 2004a).
Hence, the point is that the commercial presence per se does not lead to the
movement of students for acquiring knowledge and skills. As noted earlier, even
though 100 per cent Foreign Direct Investment (FDI) on the automatic route is
allowed in higher education in India, trade in mode 3 in India is minuscule
(Raychaudhuri & De, 2008) but in the recent past, this mode is becoming important
for India because of overseas expansion of no of Indian companies, e.g. IT (Infosys,
WIPRO). However, there is no database relating to foreign service providers
operating in India. Hence most of the conclusions arrived at here are from analysis of
advertisement. Out of four modes of supply, commercial presence has shown rapid
increase but it has certain serious dimension.
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5.7 Mode 4: Presence of Natural Persons
The fourth mode exclusively deals with the movement of natural persons who
are service providers (independent of commercial presence). Trade in educational
services under this mode could be teachers or researchers going abroad on a
temporary basis as providers of services. For example, the Japanese government has
initiated steps to change the faculty composition to attract more foreign students.
Between 1983 and 1995, the number of faculty members from foreign countries in
Japan has increased from 1,168 to 3,558 (Koshi,1997), and also the Hyderabad based
Indian School of Business (IBS) faculty collaboration with US management schools is
a good example of Mode 4.16As far as India is concerned the number of teachers and
scholars from the developed world to India is not large. This is because western
scholars are generally not willing to come to developing countries for extended
periods. However, the inflow of teachers for short duration visits needs to be
encouraged because it will promote quality teaching through introduction of modern
and innovative methods of instruction.
India must put in its proposal to include commitments on movement of
teachers and researchers both at secondary and higher education level. Already, about
10,000 secondary school teachers are working outside the country for some time now
and increasingly there is growing demand for Indian teachers. The trend will continue
given the scarcity of teachers in developed world and the sufficient supply of
qualified teachers in India. Nevertheless, there is a need for making projections of
export of this educational service. The export of teachers need not be construed to
imagine that Indian schools will be deprived of their valuable assets. In fact, a healthy
market for teachers will encourage many more to join the profession domestically as
well.
Moreover, it must be remembered that many of the Indian (post) graduate
students who go abroad for higher studies receive teaching and/or research
assistantships and tuition waivers. This is a form of export of educational service in
the form of movement of natural persons. The fact that western countries need foreign
(post) graduate students to teach independent courses in their universities shows the
16 ISB, Hyderabad has faculty collaboration with the Kellogg School of Management, Wharton (University of Pennsylvania) and London Business School. See http://www.isb.edu
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need for qualified university-level teachers abroad (Deodhar, 2001). On the one hand,
it seems very beneficial for individual and country because both get income and
remittances respectively. The situation, however, may turn grave when outflows of
teachers or exports of educational services continued for long term. This trend may
cause shortage of skilled teachers in India which could have detrimental effect.
The perceived barriers in this mode are mainly related to the tight immigration
policy traditionally followed by developed countries and the issue of recognition of
qualifications of third world professionals. Since developing countries are perceived
to have a comparative advantage in this mode, the removal of barriers in labour
movement from developing countries is the main thrust in proposals put forth by it
(WTO, 2003). The problem of removing barriers in this mode is related to the fact
that most of the liberalisation proposal are on the “horizontal’ basis. This means that
movement of personnel between countries is considered only among the top layer of
employees. In the main categories scheduled in the horizontal commitments, intra-
corporate transferees and executives, managers and specialists occupy the highest
numbers (Raychaudhuri & De, 2008).
India has been one of the most vocal members in trying to push liberalisation,
under this mode for all service providers. Even though commitment in higher
education under this mode is yet to be negotiated; liberalisation of other services
under mode IV will definitely affect the movement of natural persons in higher
education. The communication from India (WTO 2000a) states that mode IV is of
primary interest to developing countries that have a comparative advantage in human
resources. Therefore, India demands liberalisation in Mode IV mainly because of the
large possibilities of export of service providers from the information technology,
medicine, engineering, finance, education, architecture and construction industries are
also the entertainment and hospitality industries. India however, is not alone in
demanding liberalisation of Mode IV; there is also a proposal put forth on this by 14
developing countries jointly, including China and Mexico, which reiterates India’s
position (WTO 2003). However, there is scope of gains under mode 4 from the stand
point of India that it should pursue in the negotiations under GATS. The following
points need to be included in the negotiations.
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There should be elaborate classification of workers on the basis of ILO list. It
should include workers of professional services, construction and related
engineering services, computer services, services relating to agriculture and
allied activities, hunting, forestry, health etc. In education services teachers,
lab technicians, researchers, professors should be included as natural persons.
Visa rules for the movement of natural persons should be liberal. In fact
member countries indicating the purpose and period of stay may issue GATS
visa. Besides immigration procedures are simple.
The word temporary should not be rigidly defined in terms of number of
months/ years. The period may be as per the need of foreign country.
Quantitative restrictions on work permits should remain as per the clear and
stated national interest.
There should also be wage parity in the wages of natural’s persons with those
of wages of Foreign Service providers of similar types.
Remittances made by natural persons to their host country should not be put to
limitation.
There should also be the provision for multiple entry of natural persons
leading to the extension of period of original stay. For e.g., the entry of a
teacher for original six months may further be extended if the same person is
required to stay as researcher again for six months.
Obstacles to entry in terms of economic needs test or labour market tests need
to be rationalized. It should not be prohibitive of the movement of natural
persons. (Bhushan, 2004).
5.8 Conclusion
The important point which has been argued here is the critical link between
‘student mobility’ and ‘international trade in educational services’. In the present era
of globalization, international trade in educational services has grown substantially
over the past few decades. Today education service is truly operating in a global
context with institutions, programmes and people supplying services across borders at
an unprecedented scale. It is important to note that trade is taking place under all four
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modes, though it is not officially under the GATS, as formal commitments are yet to
be made. The liberalization process of each mode opens up different sets of
opportunities and challenges stems from a certain inherent asymmetry in the
comparative advantage intrinsic in the education sector of developed and developing
countries. It has been observed that, earlier consumption abroad (Mode 2) was
essentially to meet the demand of emerging economies but now other modes such as
cross-border supply (Mode 1) and Commercial Presence (Mode 3) are gradually
taking the lead role in trade in education services, particularly in trade between
developed and developing countries.
Knowledge and skills are the basic inputs required for most of the jobs and the
same are also the output of education services. This makes education services an
important area of trade. The technological advancement of developed countries gives
them a comparative edge to export education services to developing countries. The
developing countries on the other hand, could not, as of now succeed to export
education services. In India, it is found that number of foreign students coming to
India for education has considerably reduced in the mid-90s and after that there was
fluctuating trend. However, the developing countries interest in trade in services alive
only due to their link with the movement of natural persons. To protect their own
interest, the developing countries have to negotiate carefully in the service trade
negotiations. This is where the role of the state is important. The negotiations in
service trade take place in a different plane, unlike the negotiations in goods. The
service trade negotiations take place usually through bilateral negotiations, through a
“request and offer’ procedure. This is often called as “Item-by-Item approach”. There
are imbalances in negotiating strength of the developing countries, giving advantage
to the developed ones. However, there are certain provisions in the GATS
constitution, which are especially meant for the development of the developing
country. Article XIX.2 is one such provision. It is observed that coalition formation in
service negotiation may be a better way to negotiate rather than to negotiate just as an
individual economy. Unlike the developed countries, the developing ones are lacking
strong regional coalition (Bhagvatula, 2002).
The analysis with respect to Mode 1 depicts that, in the era of globalization
this mode is gaining importance. In India distance education programmes which
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contributes significantly to globalization of education has expanded very fast for e.g.
The Indira Gandhi National Open University (IGNOU) is the prime example which is
offering programmes in both liberal arts and professional areas. However, its courses
are being offered in several countries. While Sikkim Manipal University is the largest
private sector provider of distance education, operating through a network of more
than 750 learning centres in the country and 25 overseas centres in 25 countries, and
enrol more than 400,000 students. Likewise some foreign institutions are also offering
programmes to Indian universities.
Distance learning on the internet is a more recent phenomenon. Internet
education (or on-line education) is a fast growing sector, which is creating a great
market potential at national and international level and in future, the market for such
courses is expected to be large in India. However, India is interested in this mode 1
(cross-border supply) because trade through Business Process Outsourcing (BPO)/
Information Technology Enabled Services (ITES) is undertaken through electronic
modes of delivery i.e. Mode 1. BPO/ITES and off-shoring are likely to continue as
major thrust areas from India’s point of view17. Further, in this study it has been
found that, the comparative advantage in this mode of supply lies primarily with
developed nations because these countries are more advanced in technology and
people are more aware of latest technologies which are most suitable for successful
implementation of e-courses. However, if India wants to benefit more from this mode
it must follow the policies of developed nations.
An analysis with respect to mode 2 reveals that trade in education through
consumption abroad has existed prior to GATS, and continues to account for the
biggest share of trade in education between nations, post GATS too. Although it
forms the bulk of trade in education in the context of India, yet the scales are tilled in
favour of the developed nations. The continent-wise analysis of mode 2 in India
during the period 1990-91 to 2008-09 reveals that out of the total number of
international students in India, more than half students come from Asian continents
which are followed by African countries. However, very negligible presence of
students from America, Europe and Australasia. Thus, it clearly shows that, mainly
foreign students came to India are from the developing countries.
17 GATS. Retrieved at www.Commerce.nic.in/trade/faqs_gats.pdf . 181
The foregoing analysis with respect to mode 2 shows that, out of thirty
countries, ten countries are contributing more than half i.e. 56 per cent foreign
students to India. These are Kenya, Nepal, Iran, Ethiopia, UAE, Sudan, Bangladesh,
Sri Lanka, USA, and Jordan. Out of these top ten countries, five belongs to Low
income countries, three belongs to Lower middle income countries and the remaining
two belongs to High income countries. This strongly indicates the amount of effort
needed to attract students from other countries of the world. The analysis also found
that, Kenya has been the top most feeders of foreign students to Indian universities,
while Nepal is the second highest feeder.
Study further shows that, majority of foreign students who came to India are
from Asian and African countries. Gulf nations also send large number of students to
India. It has been observed that India is also attracting international students from
developed countries like USA, Canada, & France etc. although the number appear to
be very low but an indication has been registered at global level that Indian
universities have the quality to teach, train and produce manpower for global
competitive world. The study also found that from 2004-05 onwards; international
students in Indian universities and institutions have increased. However, there are
several reasons for such increase but some of the major grounds are; India being one
of the fastest growing economies of the world, the IT revolution and cheap cost of
educational facilities, quality of education, study exchange programmes and overlap
with their cultural values etc. attracted international students towards India in recent
years. Though, India currently only hosts a small number of international students but
the country has the potential to host many more.
The analysis also depict that, total number of students from high income
countries has increased by 6 times from 767 in 1990-91 to 4847 in 2008-09. Similarly,
students from Lower middle income countries increased but only by 2 times from a
level of 2991 to 6483 over the same period. However, students from Low income
countries have not attained the position that it achieved in the initial year of
globalization. In 1990-91, there were 7003 students, which declined to 6419 in 2008-
09. This shows that students from high income countries are increasing at a faster rate
but the actual number of students coming from low income countries still accounts
more than that from higher income countries.
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The majority of international students have identified well reputed central,
state and deemed universities in India. The most visible are IGNOU, Delhi,
University of Pune, Pune, University of Delhi, Delhi, Manipal University, Manipal,
University of Mysore, Mysore, Osmania University, Hyderabad and Symbiosis
International University, Pune who have registered more than 1000 students.
India in particular has grown into a leading player in the international students
markets and is the second most important sending country after China. This has
consequently made India one of the key markets targeted by the leading providers of
higher education. Indian student flows are intensely concentrated in English speaking
regions like USA, UK and Australia. But in recent years countries like Canada, New
Zealand and Germany etc have succeeded in attracting more Indian students by
aggressively promoting their programs in India. According to Open Door Report, US
has always been the prime destination for the majority of Indian students. The US
offers Indian students the widest range of choices in terms of institutions, degrees and
non-degree programs and academic and social environment. Thus, it shows that,
developed nations had taken advantage in globalizing their institutions and
universities since they were quickly anticipated and responded to the potentialities
and possibilities that globalization offered in the field of education. Their universities
and institutions planned and prepared accordingly. The developed countries like USA,
Canada, UK, Australia, France, and New Zealand were able to take advantage of the
situation and started exporting their education services, while China, India, Malaysia,
Singapore and Indonesia are fast emerging as exporters of this service. However,
developing countries are fears of trading with such large global players, but there are
immense opportunities and benefits which globalization offers to them. They must
avail the opportunities and reap the benefits of a liberalised trade regime. The
developing countries must gear themselves up to face the challenges posed to their
higher education system.
Further this study depicts that, today India is the leading country in sending its
students overseas for international educational exchange18. However, liberalization of
the Indian economy, a process that began in 1991, is certainly a major factor behind
the large and growing numbers of Indian students studying abroad. In 1990, only 24,
18 Retrieved from http://www.forbes.com/2007/08/05/india. 183
850 Indian students were studying abroad and it becomes just double in 1995 i.e. 42,
270. In 2011, 200,432 students are studying abroad. The number of Indian students
studying abroad increased by 8 times from 1990 to 2011. This shows that, due to
globalization there has been a steady increase in the number of Indian student
worldwide.
However, if India relates education services with ‘Consumption Abroad’ then
it can have a greater role to play in international markets only if India can maintain a
strategy to attract more foreign students by marketing its education services. Thus, to
reap the benefits of this sector and to make this sector more competitive, there is an
urgent need for the existing higher education system to undergo revamping and
restructuring and face the consequential change as a corollary in competitive world.
We must try to emulate the achievements of UK which has internationalized its higher
education at a fast rate and is likely to emerge as a leader in this area. The number of
Indian students in UK increased at a faster rate from 14,625 in 2004 to 34,065 in 2009
(UNESCO-GED). So government should play a vital role in nurturing excellent
internationalization of its higher education system in order to reap its full benefits.
The analysis with respect to mode 3, which involves movement of institutions
in the form of service providers, reveals that in India, few private and public
institutions are already trading education. For example, the Birla Institute of
Technology and Sciences, Pilani and Birla Institute of Technology in Ranchi have
already established their campuses in Dubai and Oman respectively. While the
Central Board for Secondary Education (CBSE), has opened several secondary
schools in the Gulf and other Central and West Asian countries. Thus, it shows that,
India has great potential in export of education services.
The study also found that with the advent of globalization, more and more new
foreign education providers have started entering higher education market in India
offering degree programmes mainly in the professional discipline. Most of the
institutions advertising to enrol the Indian students at their home campuses are second
grade institutions and no big names were appeared that advertised to enrol the
students. So realising the danger posed by such foreign providers to the Indian higher
education system many rules and regulations have been drafted for controlling the
operation of foreign providers. Out of four modes of supply, commercial presence has
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shown rapid increase but it has certain serious dimension. No doubt, this mode is
becoming important for India because of overseas expansion of no of Indian
companies, e.g. IT (Infosys, WIPRO).
The analysis with respect to mode 4 in India reveals that the number of
teachers and scholars from the developed world to India is not large. In contrast, about
10,000 secondary school teachers are working outside the country and increasingly
there is growing demand for Indian teachers. However, India demands liberalisation
with respect to this mode because it has a fairly large comparative advantage over the
other member countries with regard to supply of professional services in these service
sectors. It has a large pool of well-qualified professionals in the services sectors like
computer and related services, accountancy services and education services etc. i.e., it
would be in the interest to liberalise trade in education services through mode IV.
Thus, from the above study, it can be concluded that among four modes, mode
2, consumption abroad (i.e., students moving abroad to study) is currently the most
frequently used mode by which education services are traded followed by Mode 4
(movement of natural persons) and Mode 3 (commercial presence). However, new
information technologies are changing the landscape of world trade in education
services. These new technologies are making possible the delivery of content in audio
and visual formats inexpensively which has led to a surge in Mode 1 (through
internet, e-learning), i.e., cross-border supply in electronic format. However,
‘consumption abroad’ remains the most essential mode of supply of educational
services, at present it makes the largest proportion of trade in educational services. We
can say that by taking into consideration India’s strengths in the education sector, and
the possibilities for extending services in higher education abroad, India can make
commitments with respect to all the four modes, namely cross- border supply,
consumption abroad, commercial presence and movement of natural persons. As of
today India is not fully prepared for competition with the developed countries in the
field of educational services. It is necessary to improve its infrastructure facilities,
developing teaching skills and high quality standards of education, adopt a more
flexible academic structure, introduce widespread academic reforms, gather market
information and create niche markets and adopt other measures that will make Indian
education attractive to others. While making commitments India should insist on
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phased liberalisation over an adjustment (transition) period of five to six years
(Deodhar, 2002).
The data on services is on important limitation for the developing countries.
Availability of reliable data on services adds strength in service negotiations. Without
proper support of the data base it is difficult to analyse the depth of the advantages
from service trade negotiations. The already available data is not well organized.
Chang Phillip et al (1998) have prepared a table given below, which shows the
particular inadequacies of statistical domains with regard to various modes of supply
of services.
Table 5.9: Inadequacies of Statistical Domains with regard to Modes of Supply
Mode of Supply
Relevant Data Source Inadequacies
Cross border supply
BOP service statistics (categories other than travel)
-BOP not distributed between cross border supply, presence of natural persons
(individuals) and commercial presence for less than one year.
Consumption abroad
BOP Statistics (mainly the travel category)
-Travel also contains goods, and not subdivided into the different categories of
services consumed by travellers. -Some transactions related to this mode of supply are also in other BOP categories.
Commercial presence
Production, (Foreign Direct Investment) FDI and (Foreign
Affiliates Trade) FAT statistics19
-Production statistics do not distinguish between national and foreign firms.
-FDI statistics do not provide data on output (or sales); FDI definition does not match the
definition of commercial presence. -FAT basic concepts and definitions not yet
internationally agreed.
Presence of natural Persons (independent)
BOP Statistics (mostly categories other than transport and travel).
-BOP not distributed between cross border supply, presence of natural persons
(individuals) and commercial presence for less than one year
-natural persons who are residents are not covered.
Presence of natural Persons
(employees)
Employment data from FAT statistics.
-not yet available.
Source: Chang Phillip et al. (1998).
19 The foreign affiliates trade (FAT) statistical framework is designed to provide information on the activity of enterprises located in foreign markets.
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Thus, by concluding we can say that, India has one of the largest higher
education systems in the world and can do much to meet the global requirements for
higher education, and especially the requirements of the developing world. There is,
however, an imbalance in export and import of educational services in India. So, there
is an urgent need for the country to take effective steps to internationalise its higher
education system. This can be done by providing facilities to foreign students to come
to India for higher education, and by offering academic programmes overseas.
However, the role of state is important, to protect its domestic interest and negotiate
for a better deal internationally.
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